New York Times Editorial.

Nearly a year ago, as the Obama administration issued a first draft of its plan to reform the financial system, Treasury Secretary Timothy Geithner forcefully — and correctly — declared that anything less than a total overhaul would be inadequate. “Our system failed in fundamental ways,” he told Congress. “To address this will require comprehensive reform. Not modest repairs at the margin, but new rules of the game.”

That is just as true and just as urgent today. Memories may be fading of how close the system came to imploding, but the dangers are still out there. Greece’s sovereign debt crisis — now imperiling Europe — is the latest reminder, and like the American meltdown, it involves largely unregulated derivatives transactions. Greece used a derivative swap arranged by Goldman Sachs to mask the true size of its public borrowing.

And yet, comprehensive reform is in danger of stalling out. The House passed a flawed, though reasonably thorough, bill last December. In the Senate, Republicans have so far blocked movement.

Political leadership is essential from Senate leaders and from a White House that must stand up to the bankers and be ready to explain to voters why comprehensive reform is crucial to everyone’s financial security.

As early as this week, Senator Christopher Dodd, chairman of the banking committee, is expected to unveil a bill that is likely to encompass many essential aspects of reform, including new ways to protect consumers, regulate derivatives, curtail too-big-to-fail firms and police risks that threaten the entire system.

Republicans have already signaled their opposition. That has created an opening for the banks to press for piecemeal reform. That is their best hope of scuttling the parts they find objectionable, like an independent consumer financial protection agency, and getting the one change they do want, so-called resolution authority.

Resolution authority would give regulators the ability to seize and dismantle any financial firm that is deemed systemically dangerous. JPMorgan Chase and other big banks are confident that such authority would be used only on their rivals and would spare themselves a repeat of their scalding experiences in 2008 when, as they tell it, they were compelled to participate in systemwide bailouts they did not need.

Resolution authority is important to ensure that regulators can avoid chaotic failures and costly bailouts. But, by itself, it could create a false sense of control and stability. It will not work unless it is coupled with other reforms, like robust regulation of derivatives and enhanced consumer protection.

Until derivatives are traded on exchanges, in full view of the regulators, it will be nearly impossible to assess the systemic risk posed by any given financial firm. Resolution authority also will not be enough to protect the system unless Congress establishes an independent consumer financial protection agency to ensure that mortgages and other products are sound.

Such oversight was missing before the financial crisis, when regulators generally allowed banks to sell anything that turned a profit. The result was disastrous subprime lending and other dubious loans. Without a strong consumer protection regime, banks are bound to revert to the pre-crisis status quo when the coast is clear.

There are many other examples of how the components of regulatory reform work together — but not in isolation. President Obama understands this, as does Mr. Dodd. They need to hold their ground when banks and their Republican opponents fight back.